Long-established in the Semiconductors industry, Intel Corp (INTC, Financial) has enjoyed a stellar reputation. However, it has recently witnessed a daily loss of 3.57%, juxtaposed with a three-month change of 8.01%. Fresh insights from the GF Score hint at potential headwinds. Notably, its diminished rankings in financial strength, growth, and valuation suggest that the company might not live up to its historical performance. Join us as we dive deep into these pivotal metrics to unravel the evolving narrative of Intel Corp.
What Is the GF Score?
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- Financial strength rank: 6/10
- Profitability rank: 7/10
- Growth rank: 4/10
- GF Value rank: 1/10
- Momentum rank: 6/10
Based on the above method, GuruFocus assigned Intel Corp a GF Score of 68 out of 100, which signals poor future outperformance potential.
Understanding Intel Corp's Business
Intel Corp, with a market cap of $185.95 billion and sales of $54.23 billion, is a leading digital chipmaker, focused on the design and manufacturing of microprocessors for the global personal computer and data center markets. Intel pioneered the x86 architecture for microprocessors and was the prime proponent of Moore's law for advances in semiconductor manufacturing. Intel remains the market share leader in central processing units in both the PC and server end markets. Intel has also been expanding into new adjacencies, such as communications infrastructure, automotive, and the Internet of Things. Further, Intel expects to leverage its chip manufacturing capabilities into an outsourced foundry model where it constructs chips for others.
Growth Prospects
A lack of significant growth is another area where Intel Corp seems to falter, as evidenced by the company's low Growth rank. The company's revenue has declined by an average of 11.2% per year over the past three years, which underperforms worse than 88.41% of 880 companies in the Semiconductors industry. Stagnating revenues may pose concerns in a fast-evolving market.
Over the past five years, Intel Corp has witnessed a decline in its earnings before interest, taxes, depreciation, and amortization (EBITDA). The three-year growth rate is recorded at -33.2, while the five-year growth rate is at -16.2. These figures underscore potential challenges in the company's profitability.
Lastly, Intel Corp's predictability rank is just one star out of five, adding to investor uncertainty regarding revenue and earnings consistency.
Next Steps
Considering Intel Corp's financial strength, profitability, and growth metrics, the GF Score highlights the firm's unparalleled position for potential underperformance. The company's challenges in growth and valuation, coupled with a competitive and rapidly changing industry, may impede its ability to outperform in the future. Investors should closely monitor these factors and consider the long-term implications on their investment decisions.
GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
